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The financial statements for Jode Inc. and Lakely Corp., just prior to their combination, for the year ending December 31, 2020, follow. Lakely's buildings
The financial statements for Jode Inc. and Lakely Corp., just prior to their combination, for the year ending December 31, 2020, follow. Lakely's buildings were undervalued on its financial records by $60,000. Jode Inc. Revenues $ 1,300,000 Expenses (1,180,000) Lakely Corp. $ 500,000 (290,000) Net income $ 120,000 $ 210,000 Retained earnings, January 1, 2020 $ 700,000 $ 500,000 Net income (from above) 120,000 Dividends declared (110,000) 210,000 (110,000) Retained earnings, December 31, 2020 $ 710,000 $ 600,000 Cash $ 160,000 $ 120,000 Receivables and inventory 240,000 240,000 Buildings (net) 700,000 Equipment (net) Total assets 700,000 $ 1,800,000 Liabilities Common stock $ 250,000 750,000 Additional paid-in capital Retained earnings, 12/31/20 90,000 710,000 Total liabilities and stockholders' equity $ 1,800,000 350,000 600,000 $1,310,000 $ 195,000 430,000 85,000 600,000 $1,310,000
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